Insurance Company Working to Protect Airbnb Users from Bad Tenants

Although there's no denying that home-sharing service Airbnb has helped many homeowners looking to score some additional income, some users have come forward with horror stories about nightmare tenants.

Last year, the City of Mississauga began discussing the possibility of regulating the service after a number of issues arose, including an infamous Airbnb party house in Meadowvale. Around the same time that the party house news broke, Toronto Life published a personal essay by a Toronto woman who had her home trashed by a tenant who actually hired a DJ to spin in her living room. The damage totaled more than $35,000.

But while some people love it and others hate it, it's clear the service isn't going anywhere. For that reason, an Ontario insurance company is launching a new policy aimed at protecting clients against home-sharing rentals "gone wrong."

The Commonwell Mutual Insurance Group, a home and auto insurance company, recently announced its brand new Host Shield Insurance, a policy designed for people leasing their homes on a short-term basis on sites such as Airbnb, FlipKey and HomeAway.

The company says the policy protects against theft, vandalism and "innkeepers’ liability" up to $10,000 per claim.

“Home sharing sites like Airbnb are realities of the new economy and many of our clients in small and rural communities are leveraging them for additional income,” said Tim Shauf, President and CEO of The Commonwell Mutual Insurance Group. “We needed to step up and offer them an affordable way to protect their properties against potential damages.”

Interestingly enough, the company also recruited James Downs, a former detective and current security consultant at MKD International to provide tips on spotting "reckless renters."

So, what are some of this tips?

1) Knowledge is Power

"Before you start renting out your property, get as much information about your guests as possible," he advises. "Create an online application form or a PDF that you can email to a potential renter. You want to ask reasonable questions to get a picture of who the renter is and proof that it’s accurate." You might also want to creep the prospective tenant's social media accounts.

2) Google Gratuitously

Stalk that renter (online only, of course). "You can verify a lot of the information from your guests by checking out their social media," he says. "See if the city and contact information lines up. If you see any major red flags, trust your intuition. Just try running their name in Google and see if anything comes up, if they are a serial Airbnb abuser, maybe they’ve been flagged by another home owner on a chat board etc."

3) Charge Immediately

"When getting a credit card number from the guest, explain that you will be immediately charging both the total fees for their stay and an appropriate (and refundable) damage deposit. Perhaps $300-$500 for a home rental. If they object or don’t have enough credit to process the payment - decline the rental, it’s a red flag and you need to protect your home and property."

4) Don’t Be Shy

If you're new to renting, you might feel comfortable asking for a credit card to be charged and for a damage deposit. Don't be.

5) Trust Your Gut

"Though most (or all) of your interactions with the guests will be via email, you need to listen to your intuition, says Downs. "If they are reluctant to give you key information or have elaborate stories to explain delays - it’s a definite red flag."

6) Lean on Your Neighbours

There's a good chance you're not the only Airbnb user in your neighbourhood. Downs advises enlisting a fellow renter or family member to drive by your property and make sure everything looks right.

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